Recently, the FTSE Russell Index Company of the United Kingdom announced the semi-annual index review report of the FTSE Global Equity Index. The report shows that the FTSE Global Equity Index series will be transferred to 76 new A- shares and one out.

after this adjustment, the number of FTSE China a all-index constituent stocks will increase to 1973. according to the recent market value calculation, the market value of a shares in FTSE Russell emerging market index will increase from about 5.71 per cent to about 6.18 per cent, and the proportion in FTSE global index market value will increase from about 0.55 per cent to about 0.61 per cent, further enhancing its position.

Industry insiders believe that this move will attract more passive allocation funds for A shares, accelerate the "return" of foreign capital, and refocus on Chinese assets. The FTSE Russell is a globally representative index covering more than 70 countries and regions around the world, with approximately $20 trillion billion in assets invested based on FTSE Russell index products.

interestingly, on February 13, another internationally renowned index compilation company MSCI (mingsheng index) announced its quarterly index review results for February 2024. a total of 66 Chinese enterprises were removed from the MSCI China index, causing an uproar in public opinion.

Some market participants said that the above-mentioned sample adjustment or regular quarterly adjustment, due to the continuous decline of the-share market, the removed individual stock samples may be removed because they have fallen below the market value threshold. It is not necessarily a problem with the company itself. It should not be overly pessimistic and has limited impact on the trend of A shares. The strong rebound after the Spring Festival also confirmed the person's statement.

it is worth noting that small and medium-sized stocks account for a large proportion of the FTSE Russell index's new target, including AI concept stocks with a market value of about 10 billion yuan such as zhongbei communication (603220.SH) and zhongshi media (600088.SH), and even two micro-cap stocks rongzhi rixin (688768.SH) and kejingyuan (301372.SZ).

in addition, among the newly transferred targets, there are a large number of enterprises in emerging industries and high-tech fields, including huada zhizao (688114.SH), lianying medical (688271.SH), guobo electronics (688375.SH) and other science and technology board stocks, all of which are leaders in domestic medical and technological fields, which also reflects overseas attention to emerging industries and recognition of China's economic transformation and upgrading trend.

A public offering person said that with the restoration of the macro environment, the continuous development of stock market policies, the strong rebound of stock prices after the Spring Festival, and the expansion of the FTSE Russell Index A shares, it can be considered that the current A- share downward trend has ended. The market panic has basically eliminated, and there may still be repetitions in the short term, but in the medium and long term, the bottom characteristics of A shares are obvious and the allocation opportunities are prominent.

An Yun, chief investment officer of Schroder Fund, also said that from the perspective of valuation, A shares are in a position of outstanding cost performance, whether compared with history, other international markets, or cross-asset class comparison.

The International Monetary Fund (IMF) has also raised its growth forecast for China's economy in 2024, saying that China's economic growth in 2024 will still be higher than the global average. Industry insiders believe that the fundamentals of China's long-term economic improvement have not changed, the tone and direction of China's capital market development have not changed, and the potential for international investors to allocate A- shares is huge. China's capital market is still an indispensable part of the global market.

Author: Flying Fish